Emancipation

“Reform and opening” started from the top with the seminal leadership transition from Mao to Deng. Deng Xiaoping heralded China’s boom in late 1978 when he called for experiments with “economic democracy” and “emancipation” from orthodox ideas. But the boom was not simply a top-down, state-orchestrated phenomenon. In fact, the biggest contribution of the state, especially in the first phase of growth, was to get out of the way. Farmers were liberated from collectives, sparking a wildfire of capitalism in the countryside. Urban markets and industry were freed to “grow out of the plan,” making profits on surplus production and creating powerful incentives for rapid growth.

The Birth of Private Workers, The Death of People’s Communes

One Child Policy Stimulated Growth

People Who Fall Behind Will Be Beaten

Deng Understood That the World Had Changed

Xu Xiaonian

Professor of Economics and Finance, CEIBS

Xu Xiaonian is professor of Economics and Finance at the China Europe International Business School (CEIBS), an international business school located in Shanghai. He has worked for China International Capital Corporation Limited (CICC) since 1999 as Managing Director and Head of Research. Xu was ranked the No. 1 economics researcher among domestic brokerage firms in 2002 by Chinese institutional investors. Prior to joining CICC, Dr. Xu was Senior Economist with Merrill Lynch Asia Pacific based in Hong Kong, and a consultant for the World Bank in Washington, DC before that.

Xu obtained a Ph.D. in Economics from the University of California, Davis and an MA in Industrial Economics from People's University of China. He received the prestigious Sun Yefang Economics Prize in 1996, the highest Chinese award in the field, for his research on China's capital markets. Xu was also named one of China's Most Powerful People by BusinessWeek in 2009. His research interests include: macroeconomics, finance, financial institutions and financial markets, transitional economies, and China's economic reform.

Mr. Deng Xiaoping was a great, great leader. He started the process of modernization of China. He was really the first one to put the modernization of an ancient civilization in action. And before him, some scholars and philosophers realized what we need to do to modernize this ancient civilization, in particular after the first Opium War in 1840. We lost that war to Great Britain and the transition of a traditional society into a modern society began. But, for most of those years, there was war after war, war against the Western powers, and then the Japanese invasion, the civil war between the Communists and the Guomindang and Chiang Kai-shek; the Chinese people really didn't get a chance to put the idea of modernization in action. Mr. Deng Xiaoping was the first one. But we need a lot more and we need to do a lot more. So, I think the past three decades were only a starting point for the modernization of China.